Arjoon: Review short of plans

ECONOMIST DR VAALMIKKI ARJOON says the Government’s mid-year review fell short on plans to move the economy forward.

He said despite some buoyancy in the energy sector, there also appeared to be a continued over-reliance on oil and gas.

“I expected to hear more about the plans to take the economy forward,” Arjoon told Newsday, yesterday, after Finance Minister Colm Imbert’s presentation in Parliament.

“It seems to me that (from) the information he divulged, especially at the start of the mid-year, we are still clinging heavily to oil and gas.”

Arjoon said while the country may be earning “a modest increase” in revenues from oil and gas, especially in the area of gas production, “what we have to keep in mind is that this is an artificial growth.” He said the country was simply reaping the benefits of capital-investment decisions taken by the energy companies, three to four years ago.

“In addition to this, is it truly adding real value to the economy when all you are doing is extracting natural gas from below the ground, which is an exhaustible resource, and we are simply processing it and selling it?” he asked. “What we need to look at, even though there is a projection of increased growth at this stage, is the value added of the growth to the economy.

“In addition to this, what value is the increased revenue going to bring to the economy as well?”

Even though there may be increased revenues, he said, the business environment was still weak, especially in the non-energy sectors. That environment was affected by crime, low sales, insufficient access to foreign exchange and low profitability.

“On top of that, businessmen are paying higher taxes at this point in time, since the last three years.”

Arjoon said he also did not hear anything in the mid-year review about the performance of several initiatives that were outlined in the budget last year with respect to the $100,000 grants for budding entrepreneurs and how far they have come along if they really were initiated, such as the grants to budding entrepreneurs and small farmers.